PRLog reported this morning that “Investors of Playboy Enterprises filed a lawsuit in Delaware Court on behalf of current investors Playboy Enterprises, Inc. alleging breaches of fiduciary duty by members of the Playboy Enterprises board of directors for trying to sell Playboy Enterprises, Inc too cheaply to Hugh M. Hefner and Rizvi Traverse.”
Whether FriendFinder Networks makes an offer may not matter. The board will be reluctant to let the Penthouse owner see what it has under the engine, and Hugh Hefner owns so much stock that he can thwart any unfriendly deal.
It is not good when you see a significant drop in a company being acquired in cash, yet that is what we saw this morning on no formal news. Shares closed at $5.37 yesterday, but right after the open came a mud slide and the stock traded down as low as $4.70. Now shares are down “only” 7.25% at $4.98 on almost 500,000 shares in less than the first 20 minutes.
Shares closed out last week at $3.94 and were as high as $4.65 in April before the market started its slide.
Some deals are just too difficult to trust. Whether there are problems in the merger or a counteroffer is unknown. The trading action is already signaling issues here. Stay tuned.
JON C. OGG
Contact [email protected] for any questions or corrections.
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